M&S wins its War of the Roses

By Mark Potter

LONDON (Reuters) - Not for the first time, a rose was dividing Britons on Wednesday.

In the fifteenth century, the red and white rose emblems of the feuding royal houses of Lancaster and York split the country. On Wednesday, it was small shareholders in Marks and Spencer (MKS.L) battling a group of financial institutions over Stuart Rose, boss of the landmark retailer.

With the help of its army of individual investors -- who own an estimated 25 percent of Marks and Spencer's (M&S) share capital, a much higher proportion than for most firms -- Rose was confirmed in his new role of executive chairman.

But his victory only came after one of the biggest shareholder rebellions in recent history, as 22 percent of investors either abstained or voted against the appointment.

Corporate governance consultancy PIRC, which had urged investors to vote against combining the roles of chief executive and chairman, pointed out that votes against the election of directors to company boards rarely exceed 2 percent.

While financial analysts debated whether Rose's standing was damaged, many of the small investors enjoying lavish hospitality at M&S's annual shareholder meeting were sure it had not.

"You see City gents in their suits saying they can run the company better than him -- they don't know a thing," said Barry Hyman, a retired small shareholder.

"We need him and we want him to stay here."